Editor's Column

This issue of Business Law Quarterly includes the fourth of our pieces about basic ISDA documents. It also includes an article by Mike Kim about contract law which we think you’ll find of interest. And Courtney Ofosu, a new contributor, has a piece about some new Illinois legislation aimed at outlawing the filing of fraudulent liens. You may have read about the “Sovereign Citizen Movement,” a loosely connected collection of people and groups who believe that they are separate (or, sovereign) from the United States and don’t have to answer to any government authority. One of their tactics is to file liens against those persons and entities that seek to collect a debt from them. The new Illinois law is partly aimed at deterring such behavior and providing remedies against it.

My book recommendation this quarter is Willpower, by Roy. F. Baumeister and John Tierney. It’s about the things which researchers have been learning, mostly through experiments, about self-control. Did you know that it is possible to predict reasonably accurately whether someone will be a better than average student in school based on whether the individual, at age four, could resist eating a marshmallow? Or that a candidate for parole is much more likely to be granted parole if his hearing is in the first part of the morning or right after lunch, rather than in the late morning or late afternoon? And that the two are related? Making decisions wears us out. Willpower, or self-control, becomes depleted in the course of the day as we use it and we use it for all sorts of things, some of which are important and some trivial. For example, if you spend half an hour trying to pick out which wallpaper to put up in your kitchen, when that’s done you’re too fatigued to spend any effort on choosing the paper for the hallway and likely to select one of the first samples you look at just to be done with it. In fact, you’re so depleted that if your kid comes in and asks for help with his homework, you’re much more likely to be short with him. I think we’ve all experienced this in some way, but did you know that there is a biological reason for it? Or that you can compensate for it? This book covers a lot of ground and I can’t do it full justice in this short space. But I assure you that you will find it interesting. Helpful, too, I would bet.

Andrew H. Connor, Editor

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When is a Disclaimer of Warranty Conspicuous?

Individuals routinely enter into contracts every day without assigning legal terms or meanings to such simple transactions. For instance, we go to the gas station and “accept” the “offered” price for a gallon of gas that is posted on the pump, give the cashier our cash “consideration”, and walk away with a receipt “memorializing” the agreement. In today’s world, where purchases via internet or telephone from the comfort of your sofa have become as commonplace as the gas station fill-up, we hurriedly click on the "I have read and accept the above terms & conditions" box to download music onto our computers without paying much thought or attention to such “additional contract terms” (aside from the annoyance that comes from the stern "You must accept the terms & conditions to continue" pop-ups upon your failure to do so). Finally, consider that toaster that was just delivered to your home—do you read the absurdly thick instruction manual and pay attention to the legal provisions tucked away on the back page (EVEN IF THEY ARE IN BOLD CAPS), or are you like me and simply pop in your bagel and have cream cheese at the ready? Although mundane, these examples illustrate our acceptance of contract terms in day-to-day life and, when magnified or translated to a commercial context, may have costly consequences.

This article reviews two cases where, as in our toaster illustration, certain contract terms were first disclosed upon delivery of purchased goods, however the case-specific facts of each case resulted in two dramatically different outcomes.

Generally, when contract terms are first disclosed when the goods are delivered, such terms have been found effective. The landmark UCC Article 2 case of Hill v. Gateway 2000, Inc., 105 F.3d 1147 (7th Cir. 1997) set forth the reasoning behind the acceptance of such “deferred terms.” In Hill, a buyer purchased a computer by credit card via a toll-free telephone call. The computer was delivered to the buyer and the package included a set of Gateway’s standard terms (which included the disputed arbitration clause at issue in the case). Judge Easterbrook of the Seventh Circuit Court of Appeals reasoned that most buyers would not want to stay on the line and listen to every contractual provision at the time of purchase. Rather, delivery of the terms with the purchased product would be most efficient and give the buyer time to decide to not accept/return the product if the buyer did not agree with the included contract terms. Under this analysis, which has gained some traction in recent years, a contract is not completely formed until the buyer receives the goods and either keeps or returns the goods within a reasonable return period. Finally, under Hill, a seller that wishes to use the deferred terms approach would need to bring them to the attention of the buyer (i.e., “put them in the box with the goods”).

However, in a recently decided case where the facts appear to parallel those of Hill, a decidedly different outcome was reached. In Hartford Fire Insurance Company v. Roadtec, Inc., 2010 WL 4967979 (S.D.N.Y.), the District Court refused to recognize contract terms that were delivered concurrently with the purchased goods.

In Roadtec, the buyer and Roadtec both signed an “Equipment Proposal” which described the purchased machinery and gave the buyer the option to purchase an extended warranty, which the buyer chose to exercise. Included with Roadtec’s delivery of the machinery to the buyer were two manuals that were several hundred pages long. On the last page of each manual was a section titled “Warranty” which concluded with a disclaimer of the implied warranty of merchantability in bold font. The machinery broke down and resulted in a fire which destroyed it. The buyer then sued Roadtec, arguing that due to a design defect the machinery was unmerchantable¹.  Roadtec, relying on the disclaimer of merchantability in the manual, moved for summary judgment. In its decision denying summary judgment, allowing the buyer to proceed, the District Court sided with the buyer and held that the disclaimer was ineffective because it was not a part of the Equipment Proposal and since the disclaimer itself was not conspicuous.

Where in Hill the court held that the contract was not fully formed until the additional terms were delivered with the goods, the Roadtec court held that the signing of the Equipment Proposal completed the contract formation, and that at most the disclaimer of the warranty of merchantability was an additional term in a written confirmation of the contract (i.e., a proposed addition to the contract) and, under UCC §2-207(2)(b), such an additional term between merchants can only automatically become part of the contract if it does not materially alter the contract’s terms.

In addition, even if the disclaimer were not a material alteration, the Roadtec court held that the manuals’ disclaimers were not conspicuous (i.e., “so written, displayed, or presented that a reasonable person against which it is to operate ought to have noticed it”²). The test, said the court is “whether a reasonable person would notice the disclaimer when its type is juxtaposed against the rest of the agreement.” In this case, the disclaimers were written in bold type, but since the disclaimers were inserted at the end of two lengthy reference manuals and not in the operative Equipment Proposal contract itself, they were not placed in an “eye-catching location” that would commend “the attention of the non-drafting party.” Therefore, Roadtec’s effort to disclaim merchantability of the goods was not effective.

Although there are some cases which take the Hill fact pattern and apply the Roadtec analysis by recognizing the completion of contract formation over the phone (with the terms contained in the product box being considered a confirmation of the contract), certain facts in Roadtec are clearly distinguishable from the Hill case. Perhaps most importantly, while the Hill contract was created with a telephone call, the parties in Roadtec proceeded to take the time to reduce their agreement to writing. With such a written contract, the Roadtec court reasoned that there is little reason to include some key contract details while omitting others until delivery of the merchandise, and a buyer would not necessarily be “looking in the box” for additional contract terms. As is often the case in contractual disputes and commercial transactions, the devil is in the details and fact pattern differences from one case to another can dramatically alter the outcome. When buying online or over the phone, don't forget to look in the box when the goods arrive.

Michael D. Kim, 312-627-4622

LLC Manager’s Duties

Earlier this year, the Delaware Court of Chancery issued an opinion which is of significance with respect to limited liability companies: Auriga Capital Corporation v. Gatz Properties, LLC.

Delaware has long recognized that directors of Delaware corporations have certain duties implied by general principles of equity, notably fiduciary duties, including duties of loyalty and good faith. Section 102(b)(7) of the Delaware General Corporation Law specifically permits a corporation’s charter to have a provision which limits the personal liability of directors for monetary damages for breach of fiduciary duties, but expressly limits this by stating that such a provision shall not eliminate or limit the duty of loyalty or liability for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law.

Many corporate charters include a section 102(b)(7) limitation, in part to encourage individuals to be willing to serve as corporate board members and take on the responsibilities of being directors without having to worry that they might be held financially liable for business decisions that did not work out. However, the duty of loyalty is to put the corporation’s interests first, meaning to protect and advance the interests of the corporation, and it may not be eliminated. The same is true about the duty of good faith, which is to act responsibly and exercise due care. That duty may not be eliminated.

LLC law is less mature and the question of whether managers of a limited liability company may (or should) have similar fiduciary duties was unsettled. But the Delaware Chancery Court has now ruled, in the Gatz case, that such duties exist except to the extent that the limited liability company agreement specifically provides otherwise.

Here are the facts in Gatz: Gatz Properties, LLC owned some land on Long Island, New York. Gatz Properties was managed and partly owned by William Gatz. (The court chose to refer to Gatz Properties and Mr. Gatz collectively as “Gatz” because Mr. Gatz controlled Gatz Properties. In this article, we adopt that convention and use the term “Gatz” with like meaning.) Gatz felt that the property could be successfully developed into a high end public golf course. With the participation of Auriga Capital Corporation (which had prior successful experience in developing golf properties) and some other investors, Peconic Bay, LLC was formed and Gatz leased the real estate to Peconic under a 40 year ground lease. Then, with money from the investors and a bank loan, Peconic built the golf course.

Peconic had two classes of ownership, Class A and Class B. Initially, Gatz held a bit over 85 percent of the Class A and a little under 40 percent of the Class B. Investors held the remaining Class A and Class B interests. Understandably, Class B had certain approval rights.

According to the court, the evidence showed that the parties never intended to manage the golf course themselves and as part of the overall plan the course was subleased by Peconic to American Golf Corporation under a 35-year sublease, commencing September 20, 1999. However, the sublease gave American Golf an early termination right after ten years.

The golf course was designed by Robert Trent Jones, Jr., a famous golf course architect, and the parties had high hopes for the success of the venture. However, American Golf was never able to operate the course at a profit and after a few years began to let the course fall into disrepair. Gatz knew by 2005 that American Golf would exercise the early termination right, yet did nothing to plan for American Golf’s exit. Instead, Gatz decided to offer Peconic for sale, but without engaging a broker to market Peconic or the golf course to other golf course owners or managers. In fact, Gatz eventually held an auction at which the only bidder was Gatz, which purchased Peconic for what the court characterized as only a nominal value over Peconic’s debt. Peconic was then merged into Gatz Properties, LLC, which proceeded to manage the course following the merger.

The investors brought suit, alleging that Gatz had breached fiduciary duties to the investors and also breached the Peconic limited liability company agreement, by engaging in a course of conduct motivated to oust the investors in order for Gatz to realize the upside in value in Peconic’s long-term ground lease and the golf course. Gatz’s failure to take any steps to evaluate strategic options for Peconic, as well as his discouragement of a potential third-party purchaser, were specifically complained of in the suit.

Gatz was the sole manager under the Peconic LLC agreement. In addition, Gatz Properties always held control of the Class A interests and, through purchases from some investors, had acquired enough additional Class B interests giving it a majority of that class as well. Consequently, by the time of the auction Gatz controlled Peconic and held sufficient voting power to approve the sale and merger to Gatz Properties. Gatz argued that his actions were not subject to any fiduciary duty analysis because the LLC agreement displaced any role for the use of equitable principles in constraining the manager.

The Chancery Court decided to the contrary. It found that the Delaware LLC Act starts with the principle that managers of limited liability companies owe enforceable fiduciary duties. The court recognized that in 2004 the Delaware LLC Act had been amended to permit an LLC agreement to expand, restrict or eliminate fiduciary duties, but that the LLC agreement cannot eliminate the implied covenant of good faith and fair dealing. The court also recognized that where a contract expressly permits the actions in question, there ordinarily cannot be a breach of a covenant of good faith or fair dealing.  But, said the court, the Peconic LLC agreement did not contain any provisions stating that the only duties owed by the manager to Peconic and its investors were those set forth in the LLC agreement. Therefore, the LLC agreement did not limit the manager’s fiduciary duties and the traditional fiduciary duties of loyalty and care applied to Gatz.

Peconic’s LLC agreement did contain a provision which Gatz tried to invoke as expressly authorizing the sale and merger. Section 15 of the agreement required that agreements with affiliates had to be no less favorable than an arm’s-length agreement with an unaffiliated third party or approved by two-thirds of the disinterested ownership interests. But the court noted that an inquiry into the fairness of the Gatz-Peconic transaction must include a review of the process leading to the self-dealing, holding that an implicit requirement in such a standard is that an effort be made to determine the price at which a transaction with a third party could be achieved. In other words, Gatz had to show that he had performed a responsible examination of what a third-party buyer would have paid for Peconic before he could claim that his self-dealing was fair to Peconic. This he could not show, because he had never made any serious effort to find out what a third-party buyer would pay.

Gatz also tried to invoke an exculpatory provision in section 16 of the Peconic LLC agreement, which stated that the manager could not be liable for any loss or damage incurred by reason of any act or omission by such person on behalf of Peconic in good faith and in a manner reasonably believed to be within the scope of authority conferred on such person by the agreement, unless it constituted gross negligence, willful misconduct or willful misrepresentation. But this, said the court, only insulated action taken in accordance with the other stand-alone provisions of the LLC agreement. His failure to make any effort to find out what the course was worth was a breach of duty that occurred because he failed to act in good faith. Such a breach could not be exculpated by section 16.

In sum, the court found that Gatz pursued a bad faith course of conduct to enrich himself. He failed to act loyally to protect Peconic when it was clear that American Golf would terminate, doing nothing to plan for that eventuality even though he had a duty to try to protect the interests of Peconic. Because he wanted to eliminate the investors, he wanted the business to do poorly so that its value would deteriorate and he could acquire Peconic cheaply. So he chose not to respond to the inquiries of a third-party interested in the course and then made a purchase offer which all but one of the investors rejected. So he put Peconic up for auction and sold Peconic to himself through a process the court called bad faith and grossly negligent.

Finally, it is worth noting that the court was so put out with the manner in which Gatz’ side of the case was handled that it assessed Gatz with one-half of the plaintiff-investors’ legal costs, an extraordinary action. The court justified this by saying that it was clear that the strategy of Gatz and his lawyers was to exhaust the opponents with expensive unnecessary litigation antics and hope they would settle cheaply as a result. That was not acceptable. Said the judge: “In cases of serious loyalty breaches, such as here, equity demands that the remedy take the reality of litigation costs into account as part of the overall remedy, lest the plaintiffs be left with a merely symbolic remedy.” Something to remember.

Andrew H. Connor, 312-627-2264

New Illinois Legislation May Help Curb Fraudulent Lien Filings by Disgruntled Debtors

Disgruntled debtors seeking to evade their obligations by filing fraudulent liens soon face new threats under Illinois law. On July 25, 2012, Governor Patrick Quinn approved and signed Senate Bill 1692, which is intended to provide additional remedies for wrongfully filed UCC liens.⁵ Senate Bill 1692 becomes effective January 1, 2013 and will be incorporated into section nine of the Illinois Uniform Commercial Code. 

Senate Bill 1692 provides new civil and criminal penalties against debtors who seek to dodge their financial obligations to creditors by filing meritless liens. First, the bill prohibits any person from filing a financing statement that the person knows is not based on a valid lien, valid security agreement or a judgment of a court of competent jurisdiction; is for improper purposes; or contains materially false or misleading information. Individuals who violate this provision face a misdemeanor for the first offense and a felony for later offenses. Additionally, filers liable under the provision may also be made to pay statutory damages to injured parties. 

The 2011 Giordano’s Pizza bankruptcy action provides a familiar and local example of individuals’ use of fraudulent liens to try to escape financial liability. During the Giordano’s bankruptcy litigation, Mr. and Mrs. Apostolou, owners of the debtor, Giordano’s Pizza, were involved with a man named Marshall Home. According to the Chicago Tribune, Home is the self-proclaimed chairman of the Tucson-based Independent Rights Party.⁶ Home intervened in the bankruptcy proceedings by filing a fraudulent $150 million lien against the debtor’s assets, alleged the U.S. Bankruptcy trustee. If Home’s lien were recognized, he could have become a priority secured creditor, controlled the business and eventually returned it to the Apostolous debt-free.⁷ At the time, the pizza chain’s largest debtor, Fifth Third Bank, was owed $45 million. During the bankruptcy proceedings held in the Northern District of Illinois, Home testified in support of the validity of his lien despite the fact that Mr. Apostolou admitted on record that he never owed Home a debt. At one point, the presiding U.S. Bankruptcy Judge, Pamela Hollis, referred to Home’s actions and presence in the courtroom as “a sideshow.”⁸ Eventually, the court appointed a trustee to oversee Giordano’s Pizza and enjoined the Apostolous from entering the debtor’s businesses. 

The Giordano’s Pizza litigation provides an example of some of the tactics individuals can use to try to circumvent debts and sidestep the justice system. Now, Illinois lawmakers have taken steps to curtail frivolous filings through enacting Senate Bill 1692.

The new bill not only discourages debtors from filing frivolous lawsuits, but it also provides remedies for individuals that are wrongly named as debtors. Under Senate Bill 1692, persons wrongly named as debtors may submit an affidavit and attest that the financing statement is fraudulent. The affidavit is submitted under penalty of perjury to the Secretary of State, the entity charged with investigating fraudulently filed UCC financing statements. It should be noted, however, that persons named as debtors on financing statements by “a regulated financial institution” may not submit an affidavit alleging a fraudulent filing. Most commercial lenders are covered by the term “regulated financial institution.”

Under the new law, the filing office may refuse any record if it believes in good faith that the filing is intended to defraud or harass a public officer in the performance of his or her public duties. 

Senate Bill 1692 equips creditors like commercial lenders with the necessary tools to curtail and combat frivolous actions early in the game. Most importantly, victims of fraudulent liens can dispose of frivolous filings by simply submitting an affidavit. Such a measure should save creditors and other victims time and money. Lastly, the measure should also discourage fraudulent filers from using the justice system as a means of harassment and retribution.
 
Courtney M. Ofosu, 312-627-8324

ISDA and All That—Part IV

In the last three issues of Business Law Quarterly, we have had articles on the ISDA Master Agreement and the Schedule. This article is about the Credit Support Annex (CSA) to the Schedule to the Master Agreement. The CSA is a “credit support document” for purposes of the Master Agreement. In fact, it is a security agreement under which each party grants a security interest to the other party in order to secure the granting party’s obligations in respect of any Transactions.

Security interests in personal property in the United States are generally governed by the Uniform Commercial Code and this is true with the CSA, but because the CSA is designed for use all over the world, it doesn’t refer to the UCC and instead states that the secured party has all rights and remedies available to a secured party under applicable law with respect to the collateral, including the right to liquidate collateral.

For many types of personal property collateral, such as accounts receivable, inventory and equipment, the secured party does not take possession of the collateral. To do so would be impractical and also impede the debtor’s operations. But when collateral is required in respect of a swap transaction, the parties typically prefer that the collateral be cash or cash equivalents or other easily valued and readily marketable securities.  Security interests in such types of collateral are generally perfected by obtaining “control” either through possession (pledgor delivers (or posts)) the collateral to secured party) or by a tri-party “account control agreement” with the broker or other securities intermediary which holds the securities (either in actual physical form or as the book entry owner).

The security interest under the CSA will cover only the collateral which the granting party posts. A party is required to post collateral when it has “Exposure” above an agreed required minimum level. Either party to an ISDA Master Agreement may have to put up collateral at some point if there is a CSA as part of the contract.

The CSA itself is a form document in which the text of paragraphs one through 12 is mandated. Changes and modifications that are agreed upon by the parties are set forth in paragraph 13 which is titled Elections and Variables. Paragraph 13 is also where amounts (such as the level of Exposure required in order to trigger the obligation to post collateral) and other information needed to complete the earlier provisions is set forth.

The main issues for the parties to negotiate in the CSA are:

1. What obligations are secured? Is it just the Transactions under the Master Agreement, or are additional obligations to be included, such as obligations to repay loans under a loan agreement between the parties?
2. What kinds of collateral will be acceptable? As noted, usually the collateral must be readily marketable, such as U.S. Treasury obligations and highly-rated publicly traded corporate debt. Cash may also be used.
3. How will collateral be valued? Typically, there is a slight discount for anything other than cash. Thus, T-bills may be valued at 99 percent of current market value; corporate bonds at 98 percent and so forth. This provides the secured party with a small cushion protecting against fluctuations in value which may occur from time to time.
4. What is the minimum Exposure requirement which must exist in order for a party to have to provide collateral? Not uncommonly, collateral is not required until the amount by which one side is out of the money has reached an agreed upon level which is significant, such as $10,000.
5. Conversely, once collateral has been posted, what is the minimum “Return Amount” in order to require release of the excess? For example, if a party posted $100,000 of collateral, how much would Exposure have to decline to in order to require a return of some of the collateral?  Since the parties don’t want to be shuffling collateral back and forth very often, Exposure often has to be reduced by $10,000 or more before there is a right to get collateral back. So, when Exposure reached $100,000, a party posted that much collateral. When Exposure drops back to less than $90,000, collateral worth $10,000 is released.
6. Who will be the “Valuation Agent” that makes the valuation determinations as to Exposure in order to decide if more collateral must be delivered or some may be released? If one of the parties is a bank or other financial institution, it usually wants this role, at least in part because it is better qualified and prepared to make such determinations.
7. Who will hold any posted collateral? One possibility is that one party delivers collateral to the other to be held, but in some circumstances one or both parties may want to designate a “Custodian” to hold any collateral that they have to put up.
8. If collateral is to be held by a Custodian, who will that be? Usually, it is required to be a bank or trust company with substantial assets. If there is a Custodian, it will have to enter into a control agreement sufficient to give the secured party “control” over the collateral to the extent required by the UCC.
9. Who pays the Custodian if there is one? Typically, the party that wants a Custodian gets to pay for it.
10. What use may a party make of collateral that the other party has put up? Can the party getting collateral re-hypothecate it? Or sell it? Remember that collateral is usually cash or publicly traded debt securities, and that the party holding collateral is “in the money” and would be entitled to be paid if the Transaction being collateralized were to be terminated, so it is not unreasonable for a party holding collateral to want to be free to use it.⁹ Where there is a Custodian, however, this usually doesn’t apply.
11. Does the party holding collateral have an obligation to pay interest in respect of posted collateral? If so, at what rate? If cash is posted, the party which has the ability to use the cash is generally expected to pay a market rate of interest on the amount held. If interest bearing securities are posted, the parties can agree that the owner (the party putting up the collateral) is entitled to all interest payments from the securities.

The Events of Default under the Master Agreement are applicable to the CSA. In addition, paragraph 7 of the CSA states that an Event of Default will exist under Section 5(a)(iii)(1) of the Master Agreement if any of three circumstances should occur:

1. Failure to post collateral, transfer collateral or pay interest when due which failure continues for two business days;
2. Failure to comply with any restrictions placed upon the use of collateral by a party which failure continues for five business days; or
3. Failure to comply with any of the other provisions of the CSA which failure continues for thirty days.

If an Event of Default occurs with respect to a party, the other party will have the right to exercise remedies. In this case, that means terminating the affected Transaction(s), foreclosing upon the collateral and using the proceeds to pay itself any early termination amounts which it is owed. In addition, the CSA contains provisions which are found in most security agreements providing for payment of costs and expenses incurred by the secured party in liquidating collateral after default and payment of default interest on overdue amounts and these claims can also be paid out of foreclosure sale proceeds.

Andrew H. Connor, 312-627-2264

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_{¹ To be “merchantable,” among other things, goods must be “fit for the ordinary purposes for which such goods are used.” UCC 2-314. Equipment that sets fire to itself would not be merchantable.}

_{² UCC 1-201. Conspicuous terms include a heading in capitals or in larger type or type contrasting in font or color or set off by symbols or other marks that call attention to it.}

_{³ 40 A.3d 839 (2012).}

_{⁴ The court said the implied covenant operates “only in that narrow band of cases where the contract as a whole speaks sufficient to suggest an obligation and point to a result, but does not speak directly enough to provide a specific answer.”}

_{⁵ Senate Bill 1692 and its text can be found at http://tinyurl.com/75s2ddc.} 

_{⁶ BECKY YERAK, Arizona man Marshall Home gets security escort out of Giordano's bankruptcy hearing in Chicago, CHICAGO TRIBUNE, June 29, 2011, available at http://articles.chicagotribune.com/2011-06-29/business/ct-biz-0629-giordanos--20110629_1_arizona-man-bankruptcy-marshall-home.}

_{⁷ Pia N. Thompson, The Sovereign Citizen Movement: They Can’t Derail Your Deal But They Can Make Your Life Difficult, RENAISSANCE, Winter 2012.}

_{⁸ BECKY YERAK, Arizona man Marshall Home gets security escort out of Giordano's bankruptcy hearing in Chicago, CHICAGO TRIBUNE, June 29, 2011, available at http://articles.chicagotribune.com/2011-06-29/business/ct-biz-0629-giordanos--20110629_1_arizona-man-bankruptcy-marshall-home.}

_{⁹ This is not so different from the situation when you put money in your checking account.  You are a creditor of the bank, which owes you back your money.  In the meantime, however, the bank is free to use the money.}

_{As part of our service to you, we regularly compile short reports on new and interesting developments in our business services program. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments on this newsletter, or any Dykema publication, are always welcome. © 2012 Dykema Gossett PLLC.}